How to Reshape the Selection Boundaries between Traditional and Digital Supply Chain Finance Based on the Pledge Rate and Default Loss: Two Tripartite Game Models

Abstract

The development of digital technologies such as blockchain has provided new possibilities for solving the financing difficulties of small and medium-sized enterprises (SMEs). In order to explore the mutual influence of the participants in the supply chain, this paper constructs two static tripartite game models for traditional and digital supply chain finance, including a small and medium-sized enterprise (SME), a core enterprise (CE), and a financial institution (FI). The conditions for SME, CE, and FI to participate in digital supply chain finance, and the equilibrium strategy (repayment, repayment, loan) after participating in digital supply chain finance, are figured out. It is found that compared with the traditional supply chain, the digital supply chain expands the probability range of repayment for SME and CE by the change of pledge rate and default loss and broadens the probability range of repayment for CE by the change of default loss. Further, compared with the traditional supply chain finance, the greater the pledge rate of digital supply chain finance and the smaller the default loss, the stronger the willingness of the SME and CE to participate in the digital supply chain and the lower the willingness of the FI. After the three parties participate in the digital supply chain, however, the conclusion is the opposite. The smaller the pledge rate and the greater the default loss, the stronger the repayment willingness for the SME and CE and the stronger the loan willingness of the FI. Therefore, it is suggested to find the critical values of pledge rate and default loss and raise these two variables to an appropriate range to encourage all parties to voluntarily and consistently participate in digital supply chain financing.